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By diligently negotiating the cap on investor legal fees, you will dramatically accelerate both the diligence and the closing timeline. Most investors will easily agree to a cap of $25,000 to $50,000, and you can be sure that all of this money (and time) get chewed through on both sides. Factoring in your own legal costs, you could be looking at a $50,000 to $100,000 deal that takes between two and four months to close.

However, negotiate hard when you get a term sheet to cap the investor legal expenses at $10,000. With fees at this level, all of the work needs to go into drafting documents versus negotiating detailed terms. The lawyers themselves will feel pressure to close faster, rather than work endlessly to reach the agreed cap level. All in all, you will be looking at a cleaner deal that closes in two weeks to one month.

We're based in ATL, and have been working with local firms. As we are finishing our angel round - which we had to do ourselves - I'm considering a change. We need to keep improving our IP portfolio, prep and execute a Series A (

Wilson Sonsini Goodrich & Rosati are in Bay Area and have a reputation for life sciences companies like ours. Has anybody had any experience with them"

Posted by
tomk
on 2008-02-29

Martindale is company that runs a peer review board on lawyers. (www.martindale.com) The lawyers rate each other on ability and ethics in all areas of law. This what lawyers use to find out information on other lawyers.
They have an area called 'locate a lawyer' under it is a box 'Featured Peer Review Rated' make sure that is marked so you can see the rating system in action.